Calls to use our Brexit freedom to slash bills
By Dehenna Davison
BORIS Johnson is facing increasing demands from across the political divide to use post-brexit powers to scrapvat on fuel.
With home energy bills set to rise an average of £600 per household from April, the Prime Minister is being urged to meet his 2016 EU referendum pledge to end five per cent VAT charges, bringing an average saving of £400 a year.
The increase in heating bills – which will follow an adjustment of Ofgem’s energy price cap – is part of a rising cost-of-living crisis reflected in soaring inflation rates after emerging from the pandemic.
But a benefit of leaving the EU is that the UK can reduce its VAT rates for essentials such as fuel below five per cent, and other nonessential items under 15 per cent.
Bishop Auckland Tory MP Dehenna Davison today urges Mr Johnson to take action. She said: “Global energy prices are soaring, and many people across
AS A Conservative who firmly believes in low taxes, it is disappointing that it was a former Conservative Chancellor, Norman Lamont, who first floated the idea of 8 per cent VAT on domestic energy bills in his 1993 Budget.
It seems even more bizarre that it was Tony Blair’s Labour Party who then made the commitment to reduce this tax rate to 5 per cent in their 1997, election-winning manifesto.
“The tragedy is that those hardest hit are least able to pay” was their argument.
By this point, EU rules on VAT meant that, after January 1, 1991, once we had abolished a zero rate it could not be reintroduced, and the minimum VAT rate would be 5 per cent. So, by introducing the 8 per cent rate in 1993, the Government was committed to charging at least
our country are facing a cost of living squeeze.” Bury South Conservative Christian Wakeford also backed the call, but suggested a VAT cut “does not go far enough”.
Labour and the Lib Dems have already demanded that the Brexit powers be used and last night other organisations joined the campaign.
Former Brexit Party MEP John
CONSERVATIVE MP FOR BISHOP AUCKLAND
5 per cent VAT on energy bills for as long as we were EU members.
Then came the 2016 EU Referendum, when one of the key arguments was the unfairness of the EU’S VAT rules, particularly on domestic energy.
Now we are free from the shackles of the EU, and must embrace the opportunities that brings.
That is why I hope that VAT on domestic energy bills will be resigned firmly to the history books.
Longworth, now chairman of the Independent Business Network, said: “There are very good reasons why such a move is justifiable, and hidden reasons why the Government is avoiding making Brexit the outstanding economic success that it could BE.VAT on fuel is a bellwether of policy.”
Reform Party leader Richard Tice
said: “The extra blossom of growth created by more personal spending means the Government can easily afford to scrap thevat.”
Caroline Abrahams, of Age UK, warned that a doubling of energy bills would result in a “national emergency” for older people.
She said: “Inflation is already eating into their pensions but this unprecedented rise in wholesale energy prices will be totally unsustainable for those living on low fixed incomes.”
Mike Foster, chief executive of the Energy and Utilities Alliance, warned that those on average and lower incomes use the most energy and stand to be hardest hit.
He said: “These are the people that deserve Government help.”
The planned 1.25 per cent rise in National Insurance contributions from April, to help pay for health and social care, also came under fire. Eamonn Ives, at the Centre for Policy Studies, urged the Government to axe the rise.
He said: “It should cancel or postpone a rise that will put further downward pressure on the incomes of hardworking people.”
Last week Boris Johnson repeatedly refused calls from Labour to reduce VAT on fuel bills.
He said that the Government had already taken steps to provide support for the hardest hit, including changes to Universal Credit and the minimum wage rise.